Phillipsburg Hopes Funding From State Will Avoid Tax Hike

January 23, 1985|by JOE NIXON, The Morning Call

A little help from New Jersey Gov. Tom Kean and the state legislature would sit just fine with Phillipsburg officials who say the go-ahead on some additional state money could be the determining factor in 1985's tax rate.

So much so, in fact, that if three sources of state funding now hanging in the balance come to fruition, there will be no tax hike.

Town Manager Peter Miller said last night the town has already reduced an anticipated tax hike of 9.4 cents per $100 of assessed value to about 7.4 cents because of an $18,000 increase in federal revenue sharing, about $25,000 in excess revenues from things like increased fees and a portion of almost $100,000 the town will receive from the sale of vacant town-owned structures and property.

The tax rate would have been reduced to about 5 cents per $100 of assessed value, but town officials were notified Friday that the dumping fee at the Chrin landfill in Williams Township will be raised from $8 to $10 per cubic yard, effective Feb. 1. Miller said Phillipsburg's dumping fees at the sitehave increased 100 percent over the past year. The increase means the town will have to raise an additional $40,000.

On the heels of that development, council decided to have a resolution prepared for the next regular council meeting that would support the concept of voluntary recycling in town. Miller said he hoped to have such a program in place by about April.

Several ideas were tossed around at last night's council work session on how the program would operate, including having pickup for just newspapers, or contracting with someone to accept materials like glass or metals. The town recently received a state grant for its recycling efforts and is awaiting word on a second grant.

Councilman Daniel Duckworth observed a recycling program would not be designed to make money but to serve as a method of "cost avoidance."

Miller said the three sources of state funding include that from the divestiture of American Telephone and Telegraph, state revenue sharing and the state municipal purpose tax assistance program.

In explaining the possible AT&T money, Miller said the state charges a business corporation tax on telephone, telegraph and other types of companies. In the past before divestiture, he noted, New Jersey Bell had close to $1.2 million worth of property in Phillipsburg that garnered almost $50,000 in revenue that was paid in lieu of property taxes.

According to Miller, the breakup of the phone system transferred a lot of that equipment over to AT&T which is a "service organization" and not a telephone or telegraph company and therefore exempt from paying any type of payment in lieu of taxes. Miller said what the state is going to do is provide for a reimbursement in 1985 for all those communities that lose money as a result of the divestiture. That one-time reimbursement would amount to close to $50,000 for the town, a sum that has already been anticipated in the budget.

As far as the state municipal purpose tax assistance program is concerned, Miller said Phillipsburg received $240,000 in 1984, an initial sum of $124,000 and a supplemental grant of $116,000 in August. The program is meant to help older communities with high property tax burdens.

A bill is currently on Kean's desk would again entitle Phillipsburg to the additional $116,000.

Phillipsburg is "pretty much guaranteed" about $119,000 in state revenue-sharing funds, but Miller said a Senate bill under consideration would double the amount of the pot the state divides up. That bill would not neccesarily double Phillipsburg's portion, Miller cautioned. Miller said the amount of state revenue-sharing funds has not increased since 1976.

"We have only anticipated what we got last year in all our state and federal sources except for federal revenue-sharing where we received notification it was going up," Miller said.

Council will not hold another budget workshop session until after the fate of the additional possible funding sources is known. If no additional funds are realized, council will have to go back into the budget in search of cuts.

"I'll settle for zero," said Mayor Philip Mugavero, noting there were a lot of questions and ifs in the possible additional funding. "I guess all we can do is hope." Council members noted Warren County officials have been relatively tight-lipped recently as to what effect their yet-to-be-released budget will have on taxpayers.

"Every year we try to shoot for as low a tax increase as we can," Mugavero said. "We beg, borrow and steal from wherever we can to get it."

Miller voiced concern about using one-time revenues to offset a possible tax increase one year and then having to institute a sizeable tax increase the next year to make up for it. "As a manager, I'm just trying to get the tax rate as stable and low as possible," Miller said.

In another budget matter, Miller noted electricity costs at the town's six fire company buildings have decreased slightly despite a rate hike. Miller, who will be meeting with the town board of fire engineers next month, said the decrease does show the firemen were making a conscientious effort to conserve. Council has voiced concern in recent months over utiltity bills at the fire stations.

Fire officials, according to Miller, were concerned about a cap being placed on electrical expenses. Mugavero said he thought the town should continue to stress energy conservation and said fire officials may have to justify dramatic cost increases.